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PETITIONER: MUNICIPAL CORPORATION, JABALPUR

       Vs.

RESPONDENT: KRISHI UPAJ MANDI SAMITI AND ANR.

DATE OF JUDGMENT25/01/1990

BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) THOMMEN, T.K. (J)

CITATION:  1990 AIR  601            1990 SCR  (1) 144  1990 SCC  (2)  33        JT 1990 (1)    82  1990 SCALE  (1)67

ACT:     M.P.  Municipal  Corporation  Act,  1956:  Section   415 "Anything done or intended to be done under the Act"--Inter- pretation    or--’Local    Authority’--Refusal    to     pay taxes--Whether obligatory on Corporation to refer dispute to Government.     M.P.  Municipalities Act, 1961: Section 334.  Difference between section 4 15 of 1956 Act and Section 334 of 1961 Act explained.     M.P. Krishi Upaj Mandi Adhiniyam, 1973: Section 7 Krishi Upaj Mandi Samiti--Whether a local authority.

HEADNOTE:     The  appellant--Corporation  assessed  property  tax  in respect  of  buildings belonging to  the  respondent--Market Committee,  which refused to pay the same. Proceedings  were commenced for recovery of the dues. The respondent moved the High Court under Article 226 of the Constitution for  quash- ing the recovery proceedings.     The  High Court following its earlier  decision  arising under  Section  334  of the M.P.  Municipalities  Act,  1961 allowed  the petition, quashed the recovery proceedings  and directed the Corporation to refer the dispute to the Govern- ment  under  Section 415 of the M.P.  Municipal  Corporation Act, 1956.     Aggrieved  by the aforesaid decision,  the  Corporation, appealed to this court. Allowing the appeal, this Court,     HELD: 1. The assessment of tax or demand of any fees  by the  Corporation under the provisions of the M.P.  Municipal Corporation  Act, 1956 could fail within the term  "anything done or intended to be done under the Act" as provided under Section 415 of the Act. Even 145 refusal  of  the  Corporation  to  consider  the  objections against assessment and recovery of tax or fees could also be considered  as "anything done or intended to be  done  under the Act". But section 415 does not provide that the Corpora- tion has to move the Government when the local authority has refused to pay the tax or fees levied and demanded.  [148GH; 149A]

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   2.  The structure of section 415 of the  M.P.  Municipal Corporation  Act, 1956 is different from section 334 of  the M.P. MuniCipalities Act; 1961. Section 415 speaks of dispute between  the  Corporation  and local  authority  as  regards anything  done or to be done under the Act. And such a  dis- pute  shall  be  referred to the  Government  for  decision. Section  334  refers to a dispute on a matter in  which  the Municipal Council and local authority are jointly interested and  it  states that such dispute shall be referred  to  the State Government for decision. Section 334 does not refer to the  dispute as regards "anything done or to be  done  under the Act." Section 415 does not speak of any dispute in which the  Corporation and the local authority are jointly  inter- ested.  There are no rules framed for operation  of  section 415 while under section 334 the State Government has  framed Rules.  In view of these differences the view taken  by  the High  Court that the Corporation must take steps to  resolve the  dispute cannot be justified. It has apparently no  sup- port either from the terms of section 415, or from any rules framed for the purpose. Therefore, the recovery  proceedings should  not  have been quashed by the High  Court.  And  the Corporation  should  not  have been directed  to  refer  the dispute  to  the Government under section 415  of  the  M.P. Municipal Corporation Act, 1956. [150F-H; 151A]     Jawahar  Krishi Upaj Mandhi Samiti Gadarwara &  Anr.  v. Municipal  Committee Gadarwara & Anr. Misc.Petition No.  994 of 1981 decided by the M.P. High Court on 5.5.1983,  distin- guished.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No.  480  of 1986.     From the Judgment and Order dated 10.7.85 of the  Madhya Pradesh High Court in Misc. Petition No. 1235 of 1984. D.N. Mukherjee and Ran jan Mukherjee for the Appellant.     S.S. Khanduja, Yashpal Dingra and Baldev Kishan for  the Respondents. The Judgment of the Court w. as delivered by 146     K.  JAGANNATHA  SHETTY, J. This appeal by leave  from  a judgment  of the M.P. High Court concerns the scope of  Sec- tion  415 of the M.P. Municipal Corporation Act, 1956  (’the Act’ for short). The circumstances can be shortly stated.     Within the Jabalpur Municipal Corporation limits,  there is  a ’Mandi’ established under the M.P. Krishi  Upaj  Mandi Adhiniyam, 1973 (’Adhiniyam’) covering an area of 55  acres. It  is enclosed by high boundary wall and is under the  con- trol  and jurisdiction of the Krishi Upaj Mandi  Samithi  or otherwise  called the Market Committee. Under Section  7  of the Adhiniyam, the market Committee is a body corporate with power  to  provide facilities for regulation of  buying  and selling of agricultural produce and establishment of  proper administration of the market. Section 7(3) of the  Adhiniyam provides  that  notwithstanding anything  contained  in  any enactment for the time being in force, every market  commit- tee shall for all purposes, be deemed to be a ’local author- ity’. Inside the Mandi, the market committee appears to have constructed  office  buildings,  shop  complexes,   godowns, market  yards,  shades  and other  buildings.  The  Jabalpur Municipal  Corporation assessed property tax in  respect  of the buildings within the Mandi area and also demanded  safai tax, water tax, electricity charges, development charges for

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the  years 1980-81 to 198384. The market committee  has  re- fused  to pay the same and claimed that the corporation  has no  jurisdiction to levy and collect such taxes or  charges. The Corporation did not agree with that claim and  initiated proceedings  to  recover the dues.  Challenging  the  action taken,  the  Market  Committee moved the  High  Court  under Article  226 of the Constitution for quashing  the  recovery proceedings.  The High Court following an  earlier  decision arising  under Section 334 of the M.P.  Municipalities  Act, 1961, allowed the petition and quashed recovery proceedings. The  High Court also directed the Corporation to take  steps in accordance with Section 4 15 of the Act for resolving the dispute  with  the market committee. The order of  the  High Court reads as follows: "Section  415  of the M.P. Municipal Corporation  Act,  1956 provides  for adjudication of disputes between the  Corpora- tion  and  local authorities by the State  Government  on  a reference  made  to it for this purpose.  The  corresponding provision  in the M.P. Municipalities Act, 1961  is  Section 334. In a similar situation, where recovery proceedings  had been commenced against a Krishi Upaj Mandi Samiti, like 147 the  petitioner,  by  the Municipal  Council,  Gadarwara,  a Division  Bench in Misc. Petition No. 994 of  1981  (Jawahar Krishi Upaj Mandi Samiti, Gadarwara and another) decided  on 5.6.1983  quashed the recovery preceedings and directed  the Municipal  Council  to take steps under section 334  of  the M.P.  Municipalities Act, 1961 for adjudication of the  dis- pute between itself and the Krishi Upaj Mandi Samiti.  Since section  415 of the M.P. Municipal Corporation Act, 1956  is in pari materia with section 334 of the M.P.  Municipalities Act, 1961 that decision has to be followed.          Consequently, this petition is allowed. The pending recovery proceedings against the petitioner are quashed  and the  respondent Municipal Corporation, Jabalpur is  directed to  take steps in accordance with section 4 15 of  the  M.P. Municipal  Corporation Act, 1956 for resolving  its  dispute with  the  petitioner.  The parties  shall  bear  their  own costs."     In this appeal, the Municipal Corporation, Jabalpur  has challenged the validity of the above order.     Before  us, the core of the argument of learned  counsel for  the  appellant is that the Market Committee  is  not  a local authority either under the Municipal Corporation  Act, or  under  the M.P. General Clauses Act, 1957. It  has  been declared  to be a local authority only for purposes  of  the Adhiniyam and that declaration could not be relevant for the purpose  of  Section 415 of the Act.  The  Market  Committee unless  it falls within the definition of ’local  authority’ under the M.P. General Clauses Act, 1957, the dispute  under Section 415 of the Act could not be referred to the  Govern- ment. Counsel also referred to us the various provisions  of the  Act which confer power on the Corporation to  levy  and collect taxes and charges.     Indisputably, the respondent is not a local authority as defined under M.P. General Clauses Act, 1957. Section  2(20) of the said Act defines ’local authority’ to mean "a munici- pal  corporation, municipality, local board, Janapad  Sabha, village  panchayat, or other authority legally entitled  to, or  entrusted by the Government with the control of  manage- ment of a municipal or local fund." Counsel for the respond- ent however, strongly relied upon Section 7(3) of the  Adhi- niyam  which  provides that the Market  Committee  shall  be deemed to be a local 148

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authority  notwithstanding anything contained in  any  other enactment.     It  seems to us that it is not necessary to express  any opinion on this controversy and even if we assume in  favour of  the  respondent  that it is a  local  authority  without deciding,  the  recovery  proceedings could  not  have  been quashed  by  the High Court. And the Corporation  could  not have  been directed to refer the dispute to  the  Government under Section 415 of the Act. Section 4 15 of the Act reads: "Disputes between Corporation and local authorities: If any dispute arises between the Corporation and any  local authority as regards anything done or to be done under  this Act, it shall be referred to the Government for decision and such  decision may include an order as to costs of  any  en- quiry ordered by the Government, and shall be final.          Provided that it shall be competent to the Corpora- tion  and the local authority to agree in writing  that  any such dispute shall, instead of being referred to the Govern- ment  for decision, be referred to the decision of an  arbi- trator  or arbitrators appointed under the Arbitration  Act, 1940,  or to a civil court under Section 20 of the  Code  of Civil Procedure, 1908."     The  Section  is clear and provides  that  the  disputes arising  between  the  Corporation and  local  authority  as regards anything done or to be done under the Act, shall  be referred to the Government for decision. It shall be  compe- tent also to the Corporation and local authority to agree in writing  that any such dispute shall, instead of  being  re- ferred  to the Government be referred to the decision of  an arbitrator  under  the Arbitration Act or to a  civil  court under Section 20 of the Code of Civil Procedure. The assess- ment  of tax or demand of any fees by the Corporation  under the  provisions of the Act could fall within the term  "any- thing done or intended to be done under the Act" as provided under  Section 415. Even refusal of the Corporation to  con- sider the objections against assessment and recovery of  tax or  fees could also be considered as "anything done  or  in- tended  to be done under the Act". The question however,  is whether  it would be obligatory for the Corporation  in  the event  of the local authority refusing to pay taxes or  fees to approach the Government or refer the dispute 149 to  the Government for decision? The answer to the  question should  be  in the negative. Section 4 15 does  not  provide that  the  Corporation has to move the Government  when  the local  authority has refused to pay the tax or  fees  levied and demanded. There are also no rules framed by the  Govern- ment regulating the exercise of power under the Section  and at  any  rate our attention has been drawn to  no  statutory rules framed under the section.     The  High Court however, has followed its earlier  deci- sion  arising under Section 334 of the  Municipalities  Act. There  the  dispute arose between  the  Gadarwara  Municipal Council  and Mandi Samiti Gadarwara as to the  authority  of the former to collect takes and charges from the latter. The Mandi Samithi was an authority constituted like the  present Market Committee under Section 7 of the Adhiniyam and  func- tioning  within  the  Municipal limits.  It  challenged  the recovery proceedings initiated by the Municipal Council  and moved  the High Court for appropriate relief  under  Article 226 of the Constitution. The High Court quashed the recovery proceedings  and directed the Municipal Council to  approach the  Government under Section 334 of the Municipalities  Act to  resolve the dispute. This decision, we think,  overlooks

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the plain terms of Section 334 and even otherwise it is  not relevant for operation of Section 415 of the Act. Section 334 of the M.P. Municipality Act, 1961 reads: "Dispute between Council and other local body: (1)  In the event of any dispute arising between  a  Council and  any other local authority established under  any  State Act  on a matter in which they are jointly interested,  such dispute  shall  be referred to the State  Government,  whose decision shall be final." Under  this  Section the State Government has  framed  rules called  "Madhya Pradesh Municipalities (Regulation of  Rela- tions  between Councils and other local Authorities)  Rules, 197 1". Rules 2 and 3 are in these terms: "Rule  2.  Whenever a Council and any  other  authority  are jointly  interested  in  any matter, such  matter  shall  be settled amicably between them and where they do not come  to a  mutual  agreement, the matter shall be  referred  to  the Collector. 150 Rule 3. The Collector shall then arrange a joint meeting  of the Council and Local Authority and manage to bring about an amicable settlement."     The  rules  thus provide that the dispute in  which  the Council  and local authority are jointly interested  in  any matter, but not possible to settle the dispute mutually, the matter  shall  be referred to the Collector.  The  Collector shall try to bring about an amicable settlement by arranging a  joint meeting of both the authorities. Rules 4 and 5  are also relevant in this context and may be read: "Rule  4.  If the talk for amicable  settlement  fails,  the Collector shah persuade the Council and the local  authority to agree in writing to refer the matter to an arbitrator  or arbitrators appointed under the Arbitration Act, 1940 and if they agree, the matter shall be referred to such  arbitrator or arbitrators, as the case may be. Rule 5. When the Council and local authority do not agree to refer  the matter to arbitration the Collector  shall  refer the  matter to the State Government with his comments on  it and the decision of the State Government shall be final."     Under Rule 5, it would be for the Collector to refer the matter to the Government with his comments, and not for  the Municipal Council to approach the Government.     By  comparing the provisions of Section 415 of  the  Act with Section 334 of Municipalities Act, it will be seen that the  structure of the former is different from  the  latter. Section  4 15 speaks of dispute between the Corporation  and local authority as regards anything done or to be done under the Act. And such a dispute shall be referred to the Govern- ment  for  decision. Section-334 refers to a  dispute  on  a matter  in which the Municipal Council and  local  authority are jointly interested and it states that such dispute shall be  referred to the State Government for  decision.  Section 334 does not refer to the dispute as regards "anything  done or to be done under the Act." Section 415 does not speak  of any dispute in which the Corporation and the local authority are jointly interested. Secondly, there are no rules  framed for  operation of Section 415 of the Act. In view  of  these differences  the  view  taken by the High  Court.  That  the Corporation must take steps to resolve the dispute cannot be justified. It has apparently no support 151 either  from  the terms of Section 4 15 or  from  any  rules framed for the purpose.     In  the  result,  we allow the appeal  and  reverse  the judgment of the High Court.

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In the circumstances of the case, there will be no order  as to costs. T.N.A.                                                Appeal allowed. 152